Internet governance changes could challenge businesses

It’s no surprise that around the globe, governments and businesses were furious about revelations by former U.S. intelligence contractor Edward Snowden regarding American intelligence snooping on the data of its own citizens. A lot of this has to do with protestations by national leaders whose own intelligence agencies do much the same thing, but with less success than the U.S. National Security Agency.

Forbes recently reported that Snowden’s actions had an immediate effect on parts of the technology industry, but the fallout will soon move into other areas including in the global legal sector. Cybersecurity issues pose a threat to attorney-client privilege and new methods of communication have made electronic discovery and litigation support more complex.

Snowden’s portrayal of a government tapping cell phones, cataloging call logs and hoovering up data traffic has kicked legislative bodies into gear. From the European Commission to the United Nations and national parliaments in Brazil, Germany, Japan and more, new cyber infrastructure and laws are moving ahead – aimed at bypassing routers, cables or other nodes vulnerable to the tentacles of the NSA. However, these actions are likely to make data even more accessible to the intelligence and law enforcement agencies of the governments leading these changes.

So far, the biggest effect of this came out last month when proposals for a new Europe-to-Brazil trans-Atlantic cable to avoid the current route through Miami dominated the normally commercial agenda of the annual EU-Brazil Summit. Brazilian President Dilma Rousseff and German Chancellor Angela Merkel, both of whom had their personal phones tapped by NSA, support the proposal, and plans are in motion to finance it through a joint venture between Brazil’s Telebras and the Spanish firm IslaLink Submarine Cables.

Earlier this month, the European Parliament passed a non-binding resolution calling for the immediate suspension of the US-EU Safe Harbor framework that facilitates transatlantic data exchanges. In India, Japan, Germany, Brazil, Russia and other countries, laws are being drafted to require that Internet servers be based on national territory, that data collection records are not removed from the country, and social media apps have privacy controls that conform to local law. Restrictions would place burden on the compliance efforts of Internet companies, that Google, Microsoft and others might pull up stakes rather than navigate new legal thickets.

According to Information Technology & Innovation Foundation, U.S. software firms may lose $35 billion in sales overseas through 2016. Although, Forrester research suggests losses could be five times that amount. Forbes reports that some of those revenues will go to non-US competitors, but in some industries, the idea of the “cloud” could evaporate as security-conscious businesses revert to Earth-bound hardware.

Leading this charge are Brazil and Germany, with German influence in the EU to revive debates over the governance of the Internet. The standards of the Internet are controlled by the Los Angeles-based ICANN (Internet Corporation for Assigned Names and Numbers). But, the Snowden controversy has revived the issue, with many Latin American countries issuing a Montevideo declaration in 2013 that “expressed strong concern over the undermining of the trust and confidence of Internet users globally due to recent revelations of pervasive monitoring and surveillance.”